Despite the Office of Rail Regulation describing its performance as patchy, the company, which is responsible for maintaining the country’s track and station infrastructure, is to press ahead with the payments.

The decision, which will see Iain Coucher, the outgoing chief executive pocket £641,349, was announced within days of the toughest Budget in a generation with millions of other public sector workers being told they face a two year pay freeze.

"In the week when everyone has been asked to share the burden of reducing Britain's deficit, people will rightly be asking how NR's top executives feel this is appropriate," Mr Hammond said.

“Network Rail is of course a private company, but one that is dependant on taxpayer funding, so I am very disappointed that its executives have accepted bonuses of this scale in the current climate.

“Bonuses must be earned by exceptional performance: they should not be an entitlement.”

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Network Rail tried to defuse the row by suspending the future bonuses for top executives ending a review of the entire scheme.

It also said the senior management team had only been paid 80 per cent of the maximum amount they could have expected.

Rick Haythornthwaite, the company’s chairman – who will not receive a bonus, defended the payments. “Network Rail only rewards for success. This is measured against what matters most to passengers – a better railway with more trains on time.

"On that basis, awards for the past year have been earned, are a contractual right and should be paid.''

But the timing incensed the Rail, Maritime and Transport Union, representing among others signallers and maintenance workers who are in dispute with the company.

“While hundreds of rail workers face the prospect of being thrown on the dole, it is nothing short of a national scandal that Network Rail boss Iain Coucher is walking out of the door with a golden-handshake bonus of nearly two thirds of a million pounds,” said Bob Crow, the RMT general secretary.

“While this new Government tells low paid workers that they have got to stomach a two year pay freeze and attacks on their pensions, they are sitting back while Network Rail, to all intents and purposes a public company, fills up the coffers of the highest paid public sector boss in the country.

“It’s a disgrace and makes a mockery of the claim that we will all have to share the pain.”

Gerry Doherty, general secretary of the Transport and Salaried Staffs Association, also condemned the payouts.

“We have asked ministers to intervene to cancel the bonuses,” he said.

“If they are legally unsuccessful, we want the public members to vote against it at Coucher’s farewell annual meeting.”